There is nothing fair about the Fair Tax. First you set the taxing event at the entrance of the “Pipeline of life’s accumulation” with the income tax. Everything that one earns goes through this taxing event before it can enter the pipeline of savings, retirement, property accumulation and all other capital accumulation for which one has a tax basis to keep from being taxed on that same money twice should one elect to sell the capital item, but would only be taxed on the gain.
Then, just about the time that you reach the age where you will no longer be a wage earner and will no longer be adding to your pipeline of accumulation, but will instead begin to live off of your savings, retirement and capital accumulation some smart guy comes along and says hey, I’ve got a great idea; lets move the taxing event from the entrance of your pipeline of accumulation to the exit of that pipeline! We won’t tax you when you earn the money, we will tax you when you spend it. You can fill your pipeline of accumulated savings with all that you can earn before paying tax on it. We will call it the Fair Tax!
But wait, you might say,”I am no longer earning or accumulating wealth. I was taught that I should save for my retirement so that I could support myself and would not be a burden on society. I made many sacrifices throughout my life to accomplish that goal and now you tell me that you want to change the rules of the game and move the taxing event to the other end of the ‘pipeline’, so that everything that I have already paid taxes on over my entire life, which I was able to save, will now be taxed a second time when I spend it!!? And you will call this a FAIR TAX?”
You might ask yourself, “What the hell is fair about that?”
Proponents of the Fair Tax try to argue that, “Prices will go down, etc.”
I say Bull S**t. That doesn’t change the fact that current earners will be buying goods and services and saving, with untaxed dollars, and those that sacrificed and did things right and managed, by acting responsibly, to reach retirement age with accumulated capital through sacrifice will be competing for those same goods and services with dollars that have already been taxed!
For the retired or soon to be retired person, there is nothing fair about the Fair Tax until they can figure out a way to provide a credit against the tax for accumulated capital which has already been subject to tax.
To change the rules of the game in this drastic manner without accommodating the responsible people who saved to accomplish the admirable goal of self-sufficency, would be akin to waiting until a football team had moved the ball to within one foot of the goal line and then unilaterally declaring that the rules have just changed and they must cross the center of the field to score and no adjustment will be made for yardage they have already gained. Except, I suspect, those so affected by the Fair Tax, will take this “stick in the eye” a lot more seriously than any football game!